liability of service tax

[faruk patel]

Dear All,

Our client provide erection and commissioning services. during providing services, He sold scrap material which was not usable. Assessing officer argued that it is consideration received other than cash so he issued final show cause notice.

Kindly give suggestion whether service tax would be payable? also suggest case laws on above matter.

Regards,

faruk patel

AI Summary

Scrap Sale Separate from Service Contract Not Subject to Service Tax; May Be Subject to VAT Instead. A client providing erection and commissioning services sold scrap material deemed unusable. The assessing officer issued a show cause notice, arguing the sale was consideration received other than cash, implying a service tax liability. Respondents clarified that if the scrap sale is independent of the service contract, it should not incur service tax. The sale of scrap is separate from the service provided, and its consideration does not come from the service recipient. If taxable, it falls under VAT, not service tax, and should not be included in the taxable service value.